Community action groups in southern Sydney have threatened large protests against the decision by the New South Wales Government to go ahead with the desalination plant in Kurnell.

The Government yesterday announced that a consortium had been awarded the tender to build and maintain the plant, which will be twice the originally planned size.

About 60 people took part in a meeting held last night by the Kurnell Progress Association, to discuss how they would respond to the announcement.

A spokeswoman for the group, Susan Davis, says residents are worried about the effect the plant will have on the environment.

"We're going to have to go through all of this pain and hardship and all the destruction in the bay for what?" she said.

"It doesn't matter how many times we've asked, how many objections we've made, the Government has still gone ahead and done this."

Ms Davis also says more research needs to be done on the plant's potential environmental impact.

"Put it on hold and then wait until you have done the proper environmental studies on everything. Not this rushed thing where you just give a few details here and there, but a really in depth discussion [is needed]."

The NSW member for Cronulla, Malcolm Kerr, says the protesters are doing the right thing.

"There is furious opposition. Kurnell is the birthplace of modern Australia," he said.

"However it's not only Kurnell residents who will be losers. Sydney residents will be losers."

"They stand to have a water bill that will go up $100, and this is an environmental and economic disaster."

Council says it's being ignored

Sutherland Shire Council has also reacted angrily to the announcement.

The council says it wrote to the Premier, Morris Iemma, asking him to take into account recent rainfalls and environmental studies before proceeding any further with the plant.

But Councillor Lorraine Kelly says there has been no reply, and they were all surprised by yesterday's announcement.

"Once again we've been kept in the dark," she said.

"The council was only notified by the media. We had no idea the plant or the tender had been assigned.

"I don't think the community will be very happy in view of dam levels going up. In fact I think they'll be pretty outraged."

Desalination is unnecessary

The opposition says the recent rainfall across Sydney negates the need for the desalination plant.

The Opposition Leader, Barry O'Farrell, says the Premier appears to be obsessed with the plan to open the plant.

"[He] ignored two months of record rainfall, and is still determined to put billions of dollars into this desalination plant," he said.

"The reality is [that] this desalination plant will still provide only a fraction of Sydney's ongoing water supply."

"It does nothing to increase the use of stormwater. It's just again an example of Morris Iemma's obsession with desalination."

Tender 'on the nose'

The Greens say the four companies awarded the contract all donate money to the NSW Labor Party.

The Greens MP, Lee Rhiannon, says she does not know why the contract was awarded to these companies, but she says it does raise questions about political donations.

"We don't know if there is any link with the donations that these companies give, but when you consider that large amounts of money are handed to a political party and then when that political party is in government [and] it makes decisions that benefit that company, we know that that's on the nose," she said.

"It certainly turns people off the democratic process and it's why it's time to ban corporate donations to political parties."

Government defends the tender process

Mr Iemma has dismissed the criticism by the Greens as nonsense.

"That's just rubbish. These contracts, these tenders are done at arms length from politicians and political parties [and] there are probity officers appointed," he said.

"New South Wales has a reputation for integrity that is beyond reproach when it comes to these sorts of matters."